On 2 March, the Swiss Federal Department of Finance (FDF) announced the kick-off of a new corporate tax initiative entitled Tax Proposal 17 (hereinafter – TP17) following the unpredicted rejection of Switzerland’s corporate tax reform III by the popular vote in February.

Corporate tax reform III was expected to replace Switzerland’s preferential tax regimes with a general reduction of the corporate tax rate applicable to all companies and provided for the patent box regime, super deduction of R&D costs, notional interest deduction on surplus equity, and tax-neutral treatment of built-in gains upon the relocation of companies to Switzerland with a corresponding step-up in the assessment basis.

FDF notes that swift implementation is desired by all sides to maintain Switzerland’s competitiveness and leaves a relatively small amount of leeway. This time, cities and communes would be closely involved in preparing the new version.

Accordingly, the steering committee has already determined the road map for Tax Proposal 17. First, it is planned to hold hearings in March with political parties, cities and communes as well as with national churches and associations. The next steps will be determined upon the outcomes of the hearings, so that the new proposal is submitted to the Swiss Federal Council in June.